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To: Lizzie Tudor who wrote (70775)	10/8/1998 5:36:00 PM
From: dougjn	Read Replies (1) \| Respond to of 176387

It was started by an economist for the mortgage bankers association. Mortgage bankers normally originate mortgages, then sell them in bundles to investment bankers, who create these securitized bonds based upon them (actually remarkably complicated bundles using lots of Sun Sparc Workstation horsepower). That market is now shut down, due to the fact that short rates are so much higher than long rates. Mortgage bankers are DESPERATE for a rate cut. One securitization house that specialized in that stuff just filed Chapter 11 -- Crimi. They were thought to do a good job, and nothing wacko like LTCM. It's just that overnight their ability to sell product through collapsed. While meanwhile the value of the pools they are holding just went way down, as risk spreads go to hell. I.e. he was a motivated rumor spreader. Could happen, but I doubt he knows anything. My best guess is that Greenspan waits until the Nov. regular meeting, then drops rates .50. (And goes back to .25 six weeks later, or even skips the next time.) BWDIK? Doug